To save the economy from further decline in the face of dwindling oil revenue and depleting reserves, the Central Bank of Nigeria, CBN, has devalued the Naira by N13, equivalent of 8.3 per cent. At the end of the two-day meeting of the Monetary Policy Committee, MPC, November 25, Godwin Emefiele, CBN Governor and chairman of the MPC, said all 11 members of the committee voted to move the midpoint of the official window of the foreign exchange market from N155 per US dollar to N168 per US dollar.

Also for the first time in three years, the CBN increased the benchmark Monetary Policy Rate, MPR from 12 to 13 per cent, and the Cash Reserve Requirement, CRR on private sector deposits from 15 per cent to 20 per cent with immediate effect.

Emefiele explained that the measures became necessary considering latest developments in the international oil market, which have deepened the risks facing oil-exporting countries like Nigeria in the wake of falling oil prices. The move became even more important as there were no clear signals on how far and long the episode would last.

The CBN governor assured that the committee remains committed to strengthen the value of the domestic currency, charting a sustainable path for medium to long-term growth, stabilising prices and exchange rate in order to sustain the credibility of CBN’s policies.

However, the committee retained public sector CRR at its current level of 75 per cent, while public sector CRR stands at 75 per cent, and the foreign exchange trading position at 1 per cent.

The committee expressed optimism that, if followed through, the devaluation would promote investment and create the needed jobs for inclusive growth, especially with the reforms in the power sector and other complementary policies.